Good morning and welcome to United Community Bank's first quarter 2026 earnings call. Hosting the call today are Chairman and Chief Executive Officer Lynn Hartin, Chief Financial Officer, President and Chief Banking Officer Rich Bradshaw, and Chief Risk Officer Rob Edwards. United's presentation today includes references to operating earnings, pre-tax, pre-credit earnings, and other non-GAAP financial information. For these non-GAAP financial measures, United has provided a reconciliation to the corresponding GAAP financial measure in the financial highlights section of the earnings release as well as at the end of the investor presentation. Both are included on the website at ucbi.com. Copies of the first quarter's earnings release and investor presentation were filed this morning on Form 8-K with the SEC, and a replay of this call will be available in the Investor Relations section of the company's website at ucbi.com. Please be aware that during this call, forward-looking statements may be made by representatives of United. Any forward-looking statement should be considered in light of risks and uncertainties described on page 5 and 6 of the company's 2025 Form 10-K, as well as other information provided by the company in its filings with the SEC and included on its website. At this time, I will turn the call over to the next call today.

We've got a lot to cover. I'm going to start with our quarterly earnings update, and then we'll close with the details of our acquisition of Peach State Bank, headquartered in Gainesville, Georgia. We had a great start to 2026. For the first quarter, we realized net income of a little over $84 million, translating into EPS of 69 cents. On an operating basis, our EPS was $0.70, representing a 19% increase of $0.25. Annualized loan growth of four and three basis points helped to drive these results. Credit also performed very well this quarter, so 22 basis points, only 10 basis points, excluding NVIDIAs. 50 basis points, down one basis point from Q1 2025. 5.9% of total loans, down two basis points, 122 basis points, an 18 basis point improvement year over year, and our operating return on tangible common equity was 13.1%. We continued to return both via a $0.25 quarterly dividend and the repurchase of $37 million of our commons. We also announced the intent which qualified as Tier 2 capital. Even with the dilution from our repurchase activity, tangible book value per share rate of nearly six percent year over year decided to have been recognized by jd power as the top ranked bank for retail client satisfaction in the southeast during the quarter this is the 12th time the united team has received this recognition the dedication and genuine care straight every day it's because of them that we are the most recognized bank in the southeast we'll start

on page five and talk about our deposit results. On an end-of-period basis, our customer deposits grew by $237 million, or 4% annualized, mostly driven by DDA growth in the core. We were also very pleased that our cost of deposits moved down nine basis points to 1.67%, and that our cumulative total deposit beta stands at 39% in this down cycle, which exceeded our goal. On page 6, we turned to the loan portfolio, where our growth continued at a 4.5% annualized pace. Growth came primarily in the HELOC and CNI categories, which are two of our current areas of focus. Turning to page 7, where we highlight some of the strengths of our balance sheet, we believe that our balance sheet is in good position from a liquidity and capital standpoint to be ready for any economic volatility wholesale borrowings of any kind. Our loan-to-deposit ratio remained low and was unchanged at 82% this quarter with a solid end-of-period deposit growth. Our CET1 ratio was flat at 13.4% and remains a source of strength for the bank. On page 8, we look at capital in more detail. As I mentioned, our CET1 ratio was 13.4%, and our TCE was also flat at 9.92%. So then our buyback again in the first quarter, buying back $37 million in shares, which equated to 1.1 million shares in the quarter, or just under 1% of our shares outstanding. Moving on to spread income on page 9, spread income was down in Q1 mainly due to having two less days in the quarter. On a year-over-year basis, our spread income was up 10%. Our net interest margin increased three basis points in the quarter to 3.65% and up 29 basis points compared to last year. And the first quarter is the fifth quarter in a row of margin expansion. And it's a margin tail end from our back book repricing and from the mixed change towards loans away from securities. The next year, using just maturities, we have about $1.4 billion of assets paying down in the 4.63% range. And because of this continued impact, I would expect the margin to be up between 3 and 5 basis points. And non-interest income was $43.7 million in the quarter. this included a $5.2 million gain on an interest rate cap that was hedging a sub-debt issuance that we intend to redeem on April 30th. Excluding the cap gain, non-interest income benefited from a strong mortgage quarter and was offset by seasonally lower service charges. And we opted to sell less Navitas loans than usual. Last quarter, we sold $41.6 million in Navitas loans compared to $8.3 million this quarter, where $157.3 million in the first quarter were $151.6 million. We had a small amount of our normal merger charges, but we had two more unusual and offsetting non-operating expenses. For the FDIC special assessment that came after the Silicon Valley said the FDIC refilled its fund faster than expected and is not asking for the full assessment. We had taken the original assessment as a non-operating loss, and so the release of the assessment of $1.9 million comes through non-operating as well. Another non-operating charge in the first quarter related to a change in our payroll by changes in legislation. We had paid our employees on a current basis, and we changed this to paying our employees in a rear. Our employees would have gone nearly a month without a paycheck. So we paid an additional check, sized the one-timers, expenses were $151.6 million, relatively flat compared. Net charge-offs were 22 basis points in the quarter. Improved from last quarter, we also saw relatively flat NPAs and a nice improvement in past dues as credit quality remained strong. 13 with the allowance for credit. Our loan loss provision was $10.9 million in the quarter, which was in line with our net charge-off, moved down slightly to 1.15%. With that, I'll pass it

back to Len. Thank you, Jefferson. Now, let's move into a discussion of our Peach State Bank announcement, and I'll start with a bit of history. United began de novo in Gainesville, part of Hall County, in 2005. Over the past 20 years, we've enjoyed each state was founded that same year, 2005, $188 million, as of $13 million in deposits. Hall County is a rapidly growing part, and after this transaction, the combined bank will have the number one deposit share community together. Peach State shares the same passion for customer service as United. There's a tremendous amount of mutual respect come together and continue to win in this market. Back over to you now to cover.

Well, first, Peachtate has approximately $800 million in assets. Deal value is about $100 million and will be a 50-50 cash. We are paying 1.9 times tangible book value and 6 times cost-saved earnings, estimating 40%. While the deal is 50-50 stock and cash, we plan on repurchasing the $50 million in shares issued by year end. We estimate the deal to be $0.09 accretive in 2027. And with the planned buybacks, we estimate the deal to be $0.12 accretive. With that, I'll pass it back to Lynn to conclude.

Thank you, Jefferson. This is a great example of what we want to do in the M&A space. It is in-market, an attractive way to leverage capital and continue to grow our business. And I'd like to now open the call to questions.

Ladies and gentlemen, at this time we will begin the question and answer session. To ask a question you may press star and then one using a touch tone telephone. To withdraw your questions you may press star and two. If you are using a speaker phone we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. Once again that is star and then one to ask a question. Our first question today comes from Russell Gunther from Stevens.

go ahead with your question. Hi, this is Jake Morton on for Russell Gunther. My first question is on deposit costs. How would you expect them to trend from here in an interest rate scenario where the Fed remains on pause on a standalone basis and including Peach State? Is there room for you to bring these down further or should we expect some pressure going forward? Thanks for

for this to be from CDE maturities, but we are seeing competition out there. We do want to grow our deposits this year. So I think if you layer in the deal, being only 3% of our assets, those numbers meaningfully.

Got it. Thank you. I appreciate the color there. And my second question is for, so do you have the spot cost of deposits at the end of the quarter? And also, can you talk to the competition that you were seeing in your market? And, like, where is it most aggressive, which specific product, and also competitor-wise, if you could talk to that.

Yep, thanks. Great question. The spot cost is relatively close to the quarterly average, so I may have what we're seeing. Yeah, good morning, Jake.

In terms of competition, in terms of past quarters, I would say it's slowed down a little bit. but we're not getting a lot of special requests on pricing from the market. So I'd say it's kind of normalized, and, you know, we really don't have it. We're in six states, so we have a lot of different competitors, no single one.

Awesome. Thank you. That's it for me. I'll step back.

Our next question comes from Michael Rose from Raymond James. Please go ahead with your question.

Hey, good morning, guys. Thanks for taking my questions. Just wanted to start on loan growth. obviously really strong results in both C&I and commercial real estate. You know, you did have, you know, some continued pay down on the construction side. I guess my question is, you know, are we getting towards the end of the kind of more accelerated pay downs here? Because it seems to me, just given the growth that you've had and the momentum you've had in both C&I and CRE, that loan growth could actually accelerate from here. So just wanted to just better understand that. And then if you can talk to some of the competition, just given all the dislocation in and around your markets from the deal activity that we've seen.

I'm writing these down. T1 loan growth, you know, it's usually a seasonally low quarter. In terms of the geography, South Florida led. So Matt Bruno and South Carolina Coastal Georgia were second with North Florida in third. And in terms of the commercial lines of business that led the way was middle market, ABL, and Nevitas. And then lastly on the retail side was HELOCs. In terms of paydowns, we actually saw the biggest amount of paydowns in hospitality, which we think is a good thing. So don't see a big pickup. Normal, we do a lot of construction creelending, so it's just kind of the normal flow. So I don't see a material change there. And in terms of loan growth going forward, we remain optimistic. We think it'll be in the 5% to 6% range, providing nothing else goes on unusual in Iran. Lastly, in hiring, we'll talk about that because that's influencing things. In Q1, we saw a net increase of 10% annual growth on that in 2026, and we have nine more to hit the goal, and we think we'll get there or get close by the end of Q2.

All right, really, really helpful. Maybe just as a follow-up, just, you know, on expenses, you know, if I exclude kind of all the moving parts, it looks like you guys had really good kind of expense control. Maybe you can just talk about, you know, some of the hiring efforts that you guys might have in place as we contemplate the next couple quarters. And then if you could just touch on, you know, maybe some early investments on AI and what you guys are doing and what we could expect there from an expense build.

All right. All right, great. Rich just spoke about the numbers of the new hires that were very, I think, if you think about our expense growth is 3.5% range, but now we have these hires that you might add on to that, factoring in the better growth that could happen later in the year, but, you know, some in the near term.

Yeah, I would agree with that in terms of, you know, you've got to see a little bit of a lag with the new hires. You kind of expect it to start kicking in in five months to six months reasonably when you hire them. And so we're expecting to see a late in Q2, some help from Q4, which is also a good hire.

Michael, you mentioned AI. You know, so far I would say our AI, for example, you know, most of our AI at this time is coming in through vendors. On the fraud side, all of our vendors are heavy users of AI, and our fraud losses have actually dropped by 50% over the last two years, and partially because of that. And that's not even counting the benefits to our clients, which would be on top of that. Our contact center, where we have chatbots and other AI-enabled tools, we're seeing the ability to take more calls with the same number of agents, the same in our programming. We're doing more programming work today without adding programmers as they're using AI. So, you know, as we think about the next steps, you know, in agentic AI, I think there are clearly possibilities for some of our kind of more mundane processes, for example, flood and other things where we could get some benefit from AI. That's at just the conversational stage now, but so far I would say I wouldn't get any expense billed. Our history is any expense billed we come out of that, we more than have realized savings on.

Great. I appreciate you guys taking my questions on all the time.

Our next question comes from Gary Tenner from DA Davidson. Please go ahead with your question.

Thanks. Good morning. I just wanted to touch on M&A for a second. You guys have talked about being pretty focused in markets, small banks. Obviously, Peach State fits the bill there. Given the environment we're in, do you see a pipeline of activity where you could potentially sort of announce another deal in lockstep with this one? Any reason to think that this would take you out of the market for any period of time?

Thank you. Great question. No, I mean, if we would not have any issue, I don't believe, in doing another deal while Peach State is active, certainly given the size, given the regulatory environment, given our history, if we saw the right deal, which would have similar metrics and conditions to Peach State, I'd be more than happy to move forward.

And then just, you know, the comment around the accretion in 2027, you know, kind of adjusted for share repurchase, I guess it's sort of semantics, but, I mean, the repurchase shares, presumably that would be over and above what you would plan to do anyway, right? So, how do you kind of balance that? Get that question yourself.

Well, and I guess I'll start with that, and the reason we presented it that way with showing the effect of repurchase, our original intent was to do the entire deal, all cash, you know, in our view, and I understand it's different than a share. At the same time, if I'm evaluating a share repurchase at, you know, 11, 12 times earnings versus buying a bank at six, hey, why not buy the bank at six times earnings?

So I guess that was in our mind, and that's kind of the way we presented it. I think Len hit it on how we're thinking about the deal as a user. Makes sense. Thank you.

And our next question comes from Catherine Mueller from KBW. Please go ahead with your question.

Hi, this is Hannah Wynn stepping in for Catherine Mueller. Thanks for taking my question, and congratulations on the acquisition.

Thanks. Thanks, Hannah.

So my first question is kind of a follow-up on the buyback activity. You've bought back around 30 million shares in the past two quarters, And with the merger announcement, you mentioned that repurchasing shares could offset the dilution. I was just wondering if you could talk a little bit about the timing and the amount of buybacks we can expect moving forward from here.

That's a great question, and I do think we will buy back the $50 million by year end. We are somewhat price sensitive, so I don't want to guarantee that we're buying back shares in any given quarter. So I don't know if I would put that in the model for Q2, but I do think we are creating about $30 million that we will be contemplating purchasing on a given quarter. But it depends on the price and some other things we might have going on. It might not be an every quarter thing. So I can't help you so much on the modeling there, but I think by year end we will get the 50 in.

That's great. Thank you. And then my other question is about your fee outlook. Your fees came in strong this quarter, and I was kind of wondering where you expect these to go from here.

I expect a modest growth rate in our fee income. We have some nice growth businesses within here. Our charging services has been growing well. Our mortgage business has been going really strongly. We also have seasonal strength coming in mortgage and the Vitas as we go into the – I think you will see a nice low.

Great. Thank you so much.

Our next question comes from Stephen Scouten from Piper Sandler. Please go ahead with your question.

Hey, everyone. Thanks for the time. A couple of follow-ups maybe to some conversations that have already been covered to some degree, but Lynn, you said this was kind of like the exact type of deal you guys would look for given culture and deposits and so forth. How about, like, from a size perspective? I mean, would you guys lean towards these smaller types of deals moving forward still, or would you like to do something a little more sizable if that were available? What would be your

preference there? Yeah, you know, we have typically done deals 10%, probably at the most 15% or less of our size. We just find that institutions that size, they tend to align with us better on employee experience, client experience, community involvement, and we can be more additive. So, yes, you know, if each state had been twice as large, would we be excited about it? Absolutely. You know, there's just a limited number of those larger, you know, call them two and a half to three and a half billion dollar banks, but certainly we would be interested in those as well. You know, this one is, I think, really unique, again, given the history of the two companies together, the growth in Hall County. It was a really rapidly growing county, number one job-creating county, I believe, in Georgia. And so to be able to team together and share together made it really good.

Makes sense. I appreciate that. And then on the hiring target, I think, if I heard correctly, you guys might actually kind of hit your stated target for the year by the end of 2Q. So would you anticipate ramping up that plan further, or would it more be, hey, let's let these people, you know, ramp up over that five- to six-month timeline before we add incremental expenses on continual hiring?

Steve, that's a great question. I mean, certainly we want to hit goal, but we would be opportunistic if we saw the right people out there with the right experience and the right size portfolio. We would certainly look to do that.

Yeah, and I would just say, too, the seasonality as you get in the year, just with bonuses, those kinds of things, first quarter, second quarter are strong, starts to slow down in the third, and fourth quarter it's more difficult. So I think, you know, Rich getting out to an early start.

Yeah, that cadence makes a lot of sense. Okay, and then maybe this last thing for me would be kind of an overall NIMM trajectory from here, maybe for Jefferson. I know you said spot cost deposits was kind of the same as the quarterly average and maybe expect them to stay flat from here. So would you expect a little bit of incremental upside on the loan repricing? I think you called out $1.4 billion in fixed-rate assets.

I had mentioned that. I think we'll get three to five basis points of margin expansion in the second quarter. I think that we are slightly asset-sensitive. Rate cuts doesn't really hurt us. But I think this back-book repricing story continues. I think this mixed change towards loans away from securities continues. So we do have a wider margin throughout the year, but we do have a nice –

Got it. Thanks. Sorry if I missed that earlier. Appreciate the time, guys.

And our next question comes from Christopher Maranek from Bring Capital. Please go ahead with your question.

Hey, thanks. Good morning. I wanted to go back to Peach State Bank for a second. Would you only buy banks that have excess deposits? and that seems like an attractive feature of this transaction, and is that something that will, you know, guide your M&A interest going forward?

I would say no to that question. You know, we'd like to have a low loan-to-deposit ratio. We think we can put those deposits to work. But that's the one good thing about having a, of many, of having an 82% loan-to-deposit ratio is that we can also buy banks, small banks that are loaned up as well and give them. So that was nice to have in this acquisition. but we also think we can help out high loan-to-deposit ratio banks as well if that type of bank came about.

Got it. Thanks for that, Jefferson. And then for the new hires, is there a deposit mandate with these folks, and how will that play out as 27 comes into focus?

Certainly on the loan side, we are requiring a depository relationship whenever we do a loan, so we'll start there. But these people all have existing clients, And so we're hoping that the first is the deposits. It's easier than the loans. So we see that pretty fast, and that's all part of it.

Sounds great. Thank you all very much. Appreciate the information this morning. Thanks, Chris.

And our next question comes from Kyle Gehrman from Havdi Group. Please go ahead with your question.

Hi, this is Kyle. I'm for Dave Bishop. Thanks for taking my question. I just wanted to follow up back on fee income. I wanted to go into mortgage banking. Saw some nice trends there. I was wondering how sustainable that might be going forward, and any initiatives in place to enhance that line item?

So I'll start maybe and then pass it to Rich on the initiatives. We have one thing working for us and one thing working against us as we go into the second quarter for mortgage. First, rates you had, mortgage rates dipped to the 6% range at the end of February, which helped promote a little mini refi boom that helped out this quarter. But also, we're going into the second and third quarters, which are the strongest seasonal quarters for mortgage. So you get a little bit of an offset as you go into richer initiatives.

The challenge in mortgage's interest rates drive so much of it. And so that's a little bit hard to say. We do have a few more balance sheet products that have driven some interest. So we'll continue looking at that.

And maybe a final question. I saw a slight uptick in NPAs this quarter. I was wondering if you could provide some color on what drove that, and then maybe just a broad view of the credit quality trends.

Rob, thanks, Kyle, for the question. So I sort of anticipate asset quality to be stable, and I would expect NPAs to kind of fluctuate up and down. If you look back, you know, maybe 10 basis points up or down over time. There wasn't any one credit that moved into NPA this quarter that's a highlight or anything. It's just a standard movement in and out of non-accrual.

Awesome. Thank you. That's all I have. I'll step back.

And, ladies and gentlemen, with that, we'll be concluding our question and answer session. I would like to turn the floor back over to Lynn Harton for any closing remarks.

great thank you and appreciate everybody joining the call and again any further questions reach out to jefferson or myself and we look forward to talking to you again soon the conference has

now concluded we do thank you for attending today's presentation you may now disconnect your lines